The First Trade & Pre-open Tour Recording… Keeping optimism in check.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
A pullback triggered by the government shutdown was likely. The pullback was likely to be shallow, but unlikely to recover quickly. Sort of like the shutdown itself. Sunday night’s 8-point gap down to 2803.75 affirmed the expectation, as did the reaction down from a pre-open surge. I’m not sure whether the absence of rhetoric should have meant a political deal was close, but the market was clearly relieved — a deal was reached Monday morning while the market rallied to new highs. The morning’s bias-up target was probed up to 2822.50 during the open. The afternoon’s bias-up target was probed up to 2828.00 during the noon hour. The last half-hour surged most steeply to 2835.00 and 2836.50 into and out of the cash session close.

Overnight action’s new info…
Initially retesting the cash session close back down to 2834.00 was held, and the range had begun trending higher by midnight. A blip-up to 2842.00 into Europe’s opens wasn’t extended, but its move was complex to form a “new Globex trend extreme” requiring eventual intraday retest. A relatively narrow consolidation started slipping a couple of points, and now has collapsed into negative territory testing 2829.00. The first reaction up is already testing the earlier 2834.00 overnight low as resistance.

If, then…
To the degree that Friday’s very late probe higher can be considered a breakout, then Monday’s higher close could be considered its confirmation — but Fri/Mon breakout confirmations aren’t reliable. If the chart were inverted to form a plunging correction, then I would expect the friction of ground already covered previously to produce a reversal soon. Fresh territory like most of Monday’s range still has the friction of calculable resistance, but it’s more vulnerable to bigger capitulation. Now that the overnight probe has left a path of crumbs to find its way back up, then dipped back into negative territory, retesting the previously covered ground above can offer a more predictable friction. Probing the highs — perhaps up to 2848.00 — after gapping down would form the basis for a bearish Pivot Reversal if reversed into the close. Rallying this morning will be difficult if the earlier overnight low isn’t already recovered through the open, since yesterday’s high has been probed overnight. But a a deeper pullback this morning has a lot of room below to expend selling pressure before breaking any relevant levels that would damage the uptrend. The burden of proof is still on sellers.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2833.000 would be unlikely to trigger the 2831.75 bias-down signal at 10:15. Exiting the open under 2830.00 would be likely to trigger bias-down.